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Dealing with Debt Collectors

No one wants the phone to ring if it is a debt collector calling. A call of this nature can only mean one thing: A bill is overdue, long overdue. While the knee-jerk reaction may be to run away from the problem, knowing your rights and the proper way to proceed will restore your sense of control. More importantly, this will prevent further damage from being done.

The First Response:

If an unpaid bill is sent to a collections agency, you should receive a letter in the mail explaining the circumstances, and you may be called by a collector initially as well. The first, most important step is to confront the situation and not to ignore it. Open the letter right away and read everything. Take the collector’s call and make sure you understand the conditions for payment. Consumers typically have 30 days to dispute any facts concerning the unpaid bill, so it is in your best interest to read and listen carefully. It goes without say that if you have the means to pay the bill in full immediately, then do it.

Your Rights:

The Fair Debt Collection Practices Act protects consumers against harassment from debt collectors. There are certain things they are not allowed to do, such as calling during certain hours of the day (early morning and late at night), using abusive language and bothering you with multiple calls. The Federal Trade Commission reports that debt collection was one of the top two consumer complaints to state government offices in 2011. No matter how much money you owe, you are entitled to your rights!


Document all communication and correspondence with collectors. Take notes during calls, and retain copies of any letters you send. Record the date, time and name of each representative you speak to for future reference if necessary.  Documentation is especially important if you dispute anything or negotiate a payment plan. You may need proof of the agreed upon conditions in the future, and if you do go down this road, you will want to ask for a copy of the terms printed on their letterhead.


If you owe a debt but cannot afford to pay it in full, consider discussing payment plan options or partial debt forgiveness (otherwise known as settlement) with a collector. There are third party settlement companies that may lure you in by promising savings that will reduce the debt you owe by 50% or more. Before entering into a third party settlement process, however, it is advisable to seek the counsel of a trusted lawyer or friend familiar with the ins and outs of settlement. These arrangements can sometimes leave you owing more money as interest and fees grow if you are not making payments on your debt.

The most important thing to remember when dealing with debt collectors is to confront the situation head-on from the start. Hiding from collectors can give them grounds for a lawsuit. The more proactive you are about taking responsibility, the more likely you are to come out of the process suffering minimal damage. For more information, or to speak to an attorney at McFarlin LLP who has helped many people deal with debt and bankruptcy issues, please visit our resources and service page. I hope the above list empowers you with the knowledge you need if you ever get that dreaded collections call.